Would former British Prime Minister Margaret Thatcher have helped out Holden?

IT'S too late to ask now, but I wonder what Lady Margaret Thatcher would have made of the Australian Government's assistance to the struggling car industry.

I reckon I can guess.

She would have cut Holden loose years ago.

In her steely demeanour, Lady Thatcher was an anomaly not just as a woman but as a politician.

The Iron Lady should never have been re-elected given her hard-hearted reforms to cut industry subsidies to the struggling British manufacturing and mining industries.

Only a patriotic victory in the Falklands saw her returned to power after driving the jobless rate into double digits.

Defying stereotype, Lady Thatcher cut the apron strings and let British industries sink or swim on their own. And make no mistake, many sank like stones and have never recovered.

The fault lines of British industry were changed forever.

Truth be told, we don't like politicians telling us the truth.

We want to be cuddled and be told that everything's going to be all right

But everything is not all right when it comes to Australia's car manufacturing industry.

Already a shadow of its former self, it is increasingly clear that the car industry is a gravely ill patient on government life support.

Any industry that survives only on government subsidies, tax concessions and tariff walls should be prepared for the day when we must make a painful quality of life decision. And that time is now for the Aussie car manufacturing industry.

It is harsh but true that countries thrive when they specialise at what they are relatively best at producing.

It wasn't coal for England and it's not cars for Australia thanks to our turbo-charged Aussie dollar.

The high dollar is now a fact of Australian business life. With the rest of the world in the doldrums, Australia is looking like a pretty good place to invest and this is pushing up the value of the dollar.

This is good for consumers, making it cheaper for us to import things. But it is destroying old business models, and the car industry, with its shrinking workforce, is one of them.

Holden's announcement this week of another 500 job losses, 400 in South Australia, was a shock to many. But it shouldn't have been. Holden's Adelaide workforce was 4800 strong in 1989. After these redundancies, Holden's ranks here will have shrunk to 1750.

And this is despite the $2.17 billion that Holden estimates it will receive from government over a 12-year period.

That is a whopping taxpayer-funded price to pay and still not protect jobs.

Think about it.

For the same cost, the Federal Government could have paid the entire Holden workforce $295,000 each in 2004 to simply walk away.

Employees could have paid off their mortgages entirely and begun looking for new work.

Instead, workers look set to lose their jobs anyway.

The Productivity Commission estimates that Australian taxpayers now stump up $17.7 billion a year in industry assistance, including $8.7 billion in tariff assistance, $3.6 billion in direct budget outlays and $5.4 billion in tax concessions.

Every dollar in industry assistance is a dollar that needs to be raised in tax and that can't be spent on public services, such as roads, doctors and teachers.

There is never a good time to lose your job. But better now, with unemployment at 5.4 per cent, rather than at 12 per cent when Maggie shut the mines.

In reality, there is no job security left in the car industry, no matter what reassurances the car industry may make about a "long-term" future in Australia. Far better to refocus our efforts now and retrain affected workers with the skills needed in the new economy.

Not everyone will make the leap. Those approaching retirement may simply choose, if they can, to retire earlier.

For the rest, it's important that we, as a nation, have a really good, hard think about what Australia is good at doing.

Where will the future jobs come from?

Already, the mining sector is an important employer, for those who can migrate to where those jobs are. As our incomes grow, Australians are also spending more on services, recreational, retail and professional. The ageing of the population will need an army of aged care and health workers.

As a clever country, we'll need to outsmart our cheaper Asian neighbours, not by exporting cheaper things, but exporting ideas that make a difference.

Supporting jobs in a dying industry is unfair to both workers and to taxpayers. The best long-term security we can offer workers is to work in successful companies that turn a strong profit.

Sad as it may be, it has been a long time since that could be said of the car industry.

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